NVFY · XMAX, Inc.

This Cloud Services Agreement represents a material operational and strategic commitment by Nova LifeStyle, Inc. through its subsidiary XMax AI Inc. to scale AI-enabled infrastructure capabilities. The $4.8 million annualized commitment signals meaningful resource allocation toward cloud-based AI deployment, particularly in areas requiring specialized technical support, security compliance, and model integration — all critical for commercial AI productization. The agreement’s structure positions SuperX AI as the principal service provider, bearing responsibility for delivery quality and upstream supplier coordination, while explicitly insulating XMax AI from liability for failures attributable to third-party cloud infrastructure or model providers. Notably, the stringent compliance framework — including binding representations on sanctions status, military end-use prohibitions, and adherence to Anthropic’s EULA — reflects heightened regulatory exposure inherent in AI service provision, especially for entities operating across U.S.-regulated technology stacks. The contractual restrictions on model distillation and usage for Restricted Entities further underscore both technical and geopolitical risk mitigation as core design features. For investors, this agreement implies near-term operating expense growth tied to cloud and AI service consumption, potential dependency on a single service provider for critical AI infrastructure, and elevated compliance oversight requirements — all of which could influence scalability, margin trajectory, and regulatory risk profile going forward.